NovaGold Resources (NRI-T) has engaged Salman Partners Inc. to head up a proposed private placement of just more than 2 million units at $5.10 apiece for proceeds of $10 million.
Each unit will comprise one share plus half a share purchase warrant. One full warrant allows the holder to buy one share for $6.50 for 18 months after closing. The company has also agreed to an over-subscription allotment of up to 50%, and will pay the placement agents a commission of 5.25% of the gross proceeds of the private placement. The agents will also receive an option to acquire up to 147,059 shares at $5.10 apiece for 18 months.
NovaGold plans to use the proceeds to help fund pre-feasibility and feasibility studies on the Donlin Creek gold deposit in southwestern Alaska and for working capital.
The deal is subject to regulatory approval.
At last count, Donlin Creek’s measured resource stood at 5 million tonnes grading 3.84 grams gold, or 623,000 contained ounces. The indicated portion of the resource amounts to 68.9 million tonnes grading 3.49 grams gold, or 7.7 million contained ounces. Another 92.4 million tonnes of inferred material runs 3.66 grams gold, for 10.9 million contained ounces. The estimates are based on a cutoff grade of 2 grams gold per tonne.
When the cutoff is elevated to 3.5 grams gold, the measured and indicated resource changes to 26.9 million tonnes grading 5.06 grams gold, or 4.4 million contained ounces, with the inferred portion weighing in at 36.8 million tonnes of 5.22 grams gold, or 6.2 million contained ounces.
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